Countdown to downtown explosion

As multiple developers open new rental buildings in and near downtown Minneapolis, one thing is starting to look clearer: There probably won’t be many families with kids living in them.

A handful of executives representing some of the busiest development firms in Minneapolis spoke about their individual apartment projects Friday morning at a gathering sponsored by Meet Minneapolis. Several projects will open this summer or shortly thereafter, and most don’t expect many families with kids to move in.

Schafer Richardson, for example, plans to open Red20, a 130-unit building on North Sixth Street, in October.

“A lot of these young millennials who have moved into apartments five or seven years ago or are moving in right now are going to be having kids,” said Brad Schafer, principal of Minneapolis-based Schafer Richardson. “But where they go, or how they manage that, that’s something for us to work on.”

That view was echoed by Dave Menke, executive vice president of the Minnetonka-based Opus Group. Opus expects to open the 253-unit Nic on Fifth apartments in downtown Minneapolis to its first residents in August, but Menke said history leads him to believe there will be few young families among his new renters. In another Opus downtown project, the Carlyle Condominiums, Menke said only a handful of tenants had kids.

“Are we catering to them? Certainly,” he said. “But we haven’t found that to be prevalent, and we’re expecting a similar pool” of renters with our current projects.

Carl Runck, director of real estate development at Minneapolis-based Alatus LLC, said his company is doing what it can to cater its 319-unit Latitude 45 apartments at 301 Washington Ave. S. to young professionals and older couples whose kids have flown the coop. Many of those tenants could come from Wells Fargo & Co.’s 5,000-employee base at Ryan Cos. US Inc.’s Downtown East project just a block away.

“A year ago, the Ryan Downtown East project was just gaining momentum,” he said of financing the project. “Our out-of-town financing partners got excited about the location – particularly the proximity to those 5,000 Wells Fargo employees.”

Apartment vacancy doubled to 4 percent in downtown Minneapolis at the end of 2013, according to an Apartment Trends report released in March by Marquette Advisors. That rate was expected to rise — and should continue to rise this year as new projects open up. Two that opened last year include the 254-unit Soo Line Building City Apartments — across the street from Nic on Fifth — and the 286-unit 222 Hennepin project a couple of blocks away.

That means a competition will be on to secure pent-up demand for high-end apartments in and near downtown. One weapon in that fight: Top-flight amenities that can range from rooftop bars to dog playgrounds and fitness centers.

Latitude 45 will have public skyway access from the north, making it “the front door of the skyway system” for those in the Mill District, Runck said. The 13-story building will also feature a lounge, club room and “kegerator” — an appliance for cooling beer kegs.

The Nic on Fifth will feature about 30,000-square-feet of amenity space, including a cyber café, yoga studio and rooftop deck along Fifth Street. Red20 also has several amenities planned, including a rooftop deck with a barbecue area and green space.

Each of the buildings discussed Friday will also include ground-floor retail or bars and restaurants.

Chicago-based Magellan Development’s 36-story, 354-unit LPM Apartments will include about 41,000-square-feet of amenity space in all. Magellan is planning a media room, game room, 24-hour doorman and several other features to lure tenants. LPM Apartments will open to residents in mid-July.

The Nic on Fifth has also rented skyway space in the Baker Center to pitch its apartments. LPM has a kiosk on the ground floor of IDS Center.

“There are more amenities in this building than all of our buildings in Chicago, which are all over 500 units,” said Josh Taylor, a vice president of marketing for Magellan. “We feel that Minneapolis is prepared for another level of luxury.”